3-month extension for reduced performance guarantee for contractors

Tribune News Service

New Delhi, December 30

The Centre on Thursday acceded to the demand from contractors by extending the benefit of reduced Performance Security of 3 per cent for all Central government tenders and contracts that have been issued up to March 31, 2022.

Contractors had said that the acute financial crunch due to the pandemic is affecting the timely execution of contracts. This in turn may affect the ability of contractors to bid in tenders and hence reduce competition. So far, contractors and commercial entities had to deposit 5 to 10 per cent of the value of the contract to show due performance.

Industrial bodies, cutting across all sectors, including construction, manufacturing and services, have represented the need to extend the benefit of reduction in Performance Security, at least in the short term, said an official news release.

The relief so far has benefited industry, especially in construction, manufacturing and service sectors. This relief will enable them to respond with vigour to the demands of the government for efficient execution of the projects, it added.

The government expects that with this relief, the industry would be able to deploy additional resources in project execution. “Timely and economical project execution by industry is vital for high-speed development of infrastructure as envisaged through the National Infrastructure Pipeline,” noted the release.